Verizon, the US broadband and telecommunications giant, wants to use AOL to
expand its mobile video business

Verizon Communications has approached AOL about a possible takeover or joint-venture, according to reports.

Verizon, the US broadband and telecommunications giant, wants to use AOL to expand its mobile video business, Bloomberg claimed.

The news sent AOL shares up 11.8pc to $50 in after-hours trading on Wall Street, despite Bloomberg claiming that no formal proposal has been submitted.

AOL's technology allows the buying and selling of online adverts to be automated depending on the video they are being shown with. Verizon hopes combining this with a future online video service will help it gain ground on AT&T, Bloomberg claimed. AT&T and satellite TV provider DirecTV announced a $48.5bn merger last year, which is currently being reviewed by the US Federal Communications Commission to determine whether the deals are in the public interest.

As well as advertising benefits, a deal would also see Verizon add AOL's millions of dial-up internet subscribers, who spend an average of $20.48, according to its latest results.

AOL also owns news sites such as Huffington Post, TechCrunch and Engadget, which attract more than 200m unique visitors every month.

AOL is worth around $3.5bn, according to its closing share price on Monday, and in August revealed net profits fell to $28.2m in the second-quarter, compared with $28.5m a year earlier. Revenues rose 12pc to $606.8m.

Verizon has a market capitalisation of around $193bn.

A deal for New York-based AOL would continue Verizon's recent spending spree. Verizon finalised a deal to buy Vodafone's 45pc stake in their US joint venture for $130bn.

AOL declined to comment. Verizon could not be immediately reached for comment.